By Elaine Lies TOKYO (Reuters) - Japan's Nikkei average gained 2.6 percent on Wednesday after a tentative deal was reached on a plan to rescue the battered U.S. auto industry, with Honda Motor Co surging more than 9 percent at one point. A slightly softer yen helped exporters, including Sony Corp, which said the day before it would cut 16,000 jobs, curb investment and pull out of some businesses to save $1.1 billion a year as the financial crisis ravages demand for its electronics products. Shippers jumped on a rebound in a key freight index. The White House and congressional Democrats reached an agreement in principle on a $15 billion proposal for bailing out U.S. automakers, officials said, though an administration official and a Democratic leadership aide said the accord covered key points but final issues needed to be resolved. "The market rise started to pick up speed in the late morning with talk that an agreement was near, and it certainly leads to reassurance," said Yumi Nishimura, deputy general manager of the investment advisory section of Daiwa Securities SMBC. The benchmark Nikkei gained 228.24 points to 8,624.11 after earlier rising more than 3 percent, and the broader Topix was up 1.7 percent at 831.99. Honda climbed 8.7 percent to 2,005 yen and Toyota Motor Co was up 4.4 percent at 2,870 yen despite Goldman Sachs lowering its operating profit forecast on the company for the year to March 2009 to 208 billion yen from 624 billion yen, expecting further production cuts. The auto industry subindex rose 4.9 percent. Canon Inc climbed 3 percent to 2,755 yen and Sony rose 1.5 percent to 1,925 yen. Shippers rose after the Baltic Dry Index, the global freight index of prices for shipping commodities, inched up 1.2 percent on Tuesday, its first gain since mid-November, amid rising steel prices and firm iron ore prices. Beaten down badly over recent weeks, shippers began climbing earlier this week as hopes grew that the economic proposals being floated by various nations would keep the global economy from further worsening. Mitsui OSK Lines Ltd, operator of the world's biggest fleet of bulkers for shipping iron ore, jumped 9.8 percent to 547 yen, while Nippon Yusen KK, Japan's biggest shipping company in terms of sales, gained 7.1 percent to 531 yen. Over the longer term, analysts and fund managers predict that Japanese stocks are likely to end next year roughly 13 percent above current levels, 18 analysts and fund managers predicted in a poll conducted by Reuters the past week (Reporting by Elaine Lies)

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